Wanda Sacks Executive Involved in 2008 Bribery
Dalian Wanda, the Chinese property to entertainment group that is currently making major moves into Hollywood, has sacked an executive who was involved in bribing a government official in 2008 and 2009.
In a notice posted on its corporate website Wanda said Thursday that it had dismissed Leng Chuanjin, who had paid bribes totaling $45,000 (RMB300,000) to an official in Wanda’s Dalian home town.
The payments had been made to ease the “corporate restructuring and business operations” of Dalian Wanda Real Estate and Dalian Wanda Real Estate General, two predecessor companies to today’s Wanda group, that were transitioning from state-owned enterprises into privately-held firms.
The payments emerged in a court case earlier this year of Jin Cheng, a low-ranking Communist Party official in Dalian, who accepted a total of RMB17 million ($2.55 million at current exchange rates) in bribes from multiple sources. He was found guilty and sentenced to 13 years in prison.
The court also named another Wanda executive, Han Yuqiu, who facilitated Leng’s payments through provision of credit cards.
The details were only recently exposed in Chinese media as Wanda Commercial Properties sought to relist its shares on China’s A-share market, having quite the stockmarket in Hong Kong. The court did not accuse Wanda of wrongdoing and Wanda said in its statement that it did not know of the bribery until this week.
Wanda said that Leng and Han would have their shareholdings in Wanda Commercial Properties suspended and that dividend payments will be halted. Han has already retired and is not expected to receive administrative punishment.
Wanda described the payments as “misappropriation of corporate funds” and said that an internal audit would now be carried out, possibly leading to other penalties. It also said that its actions should serve as a severe warning to all employees.
China’s president Xi Jinping has made an anti-corruption drive a key function of his term in office. His shakeup has extended from the Communist party’s highest ranks, through the military, to provincials and regional governments. As numerous Chinese movies and TV shows reflect, officials at all levels have used their positions of power for self-enrichment. The transition from state-planned economy to a market led one created plenty of opportunities for bureaucrats to line their pockets.
Since taking Wanda into the private sector Wanda’s chairman Wang Jianlin has become China’s richest businessman and propelled Wanda proudly into being among the Fortune 500 list. A mantra he has often repeated is “to stay close to government, but distant from politics.”
In its earlier years Wanda made property its cornerstone, building offices, hotels and shopping malls. But, beginning with the dramatic acquisition of U.S. cinema chain AMC in 2012, Wang began transforming the group into a conglomerate that is more driven by cultural and service industries, and is far more international.
This year Wanda acquired Hollywood producer Legendary Entertainment and is seeking to expand AMC through the purchase of Carmike. It also bought the pan-European Odeon – UCI cinemas chain. As its bid to own a 49% stake in Paramount Pictures floundered due to the internal machinations of Viacom and the Redstone family, Wanda has in recent weeks hatched a co-financing and marketing pact instead with Sony Pictures Entertainment.
Golden Globes producer Dick Clark Productions has also confirmed that it is in sale talks with Wanda. Wanda has offered no confirmation.
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